Here is why IT major TCS has to pay $210 mn to rival firm DXC

Here is why IT major TCS has to pay $210 mn to rival firm DXC

Indian IT services company Tata Consultancy Services (TCS) has been asked to pay $210 million by a US jury for misappropriation of US IT services firm DXC’s (formerly CSC) source code to develop its software platform, TCS Bancs.

As per the ruling of the US jury, the Indian IT company accessed a trade secret by infringing DXC’s (formerly CSC) proprietary platforms.

TCS’s take

The company put out a statement after the verdict and said, “TCS respectfully disagrees with the jury’s advisory verdict. The matter will now be decided by the Court, which has ordered further briefing from the parties. We plan to continue to litigate this ongoing case. We will have no further comment as the case remains pending.”

The lawsuit is related to a 2018 deal worth a $2.5-billion deal with Transamerica. The deal was scrapped in June 2023 owing to macroeconomic conditions.

The lawsuit

The lawsuit, which was filed in 2019 by DXC, alleges that employees of the Indian IT company assigned to developing its Bancs platform encountered difficulties devising a software solution for calculating a rate of return (ROR) in a particular insurance context. The lawsuit cited emails exchanged between TCS employees that they found the necessary solution in the Vantage software. Later, a TCS employee allegedly copied and pasted the actual Vantage source code pertaining to this calculation, and resulting Vantage calculations, into an email and sent it to his TCS colleagues.

Copy/ paste

The lawsuit said one TCS employee wrote in an email, “Here is some text from the old Vantage manuals on the rate of return screen for reference if it answers any questions.” He then pasted nearly two pages from a Vantage manual describing how CSC determined “Calculated Investment Return on Annuities.”

The lawsuit further reveals that this same TCS employee looked at “transactions of interest” that are accessed by the Vantage source code in performing the calculation and sent it to his colleague via email. Another TCS employee circulated additional CSC proprietary information regarding the way that Vantage performs this calculation. The TCS employee also copied and pasted the actual Vantage source code pertaining to the calculation, and resulting Vantage calculations, into an email and sent it to his colleagues.

Other legal setbacks

It is worth noting that this latest latest ruling against TCS is another setback to the IT major after the US Supreme Court confirmed a punitive damages award of $140 million in the Epic Systems case for accessing its web portal without authorisation.

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